On November 10, Casio Computer Co., Ltd. held an online presentation on the summary of financial results for the fiscal year ending March 2021 and the second quarter. While the effects of the new coronavirus continue in the domestic and Western markets, the watch business is recovering rapidly in the Chinese market, and the profitability of the musical instrument business is improving. As a result, sales and profits declined, but I was strongly impressed by the steady recovery trend.
Sales of G-SHOCK are the same as before Corona!
According to the announcement, Casio Computer’s profit and loss situation for the fiscal year ended March 2021 and the second quarter was 63.9 billion yen in sales. This is 80% of the previous year. Operating income was 5.4 billion yen (59% year-on-year) and ordinary income was 5.6 billion yen (65% year-on-year).
By business, the watch business had sales of 38.3 billion yen, a significant increase from 22.2 billion yen in the first quarter. This is largely driven by the Chinese market, with a 49% year-on-year growth rate in the same Chinese market.
According to Mr. Seiji Tamura, Executive Officer of Casio Computer Co., Ltd., who is in charge of public relations and investor relations, “G-SHOCK’s recovery is particularly large, and in the second quarter it returned to 95% compared to the previous year (before Corona).”
G-SHOCK (such as “GMW-B5000”) using metal, which is also popular in Japan, has made great strides. In the first quarter, the product genre was in the red at -37%, but this quarter it turned to an increase of 2%. It can be said that this shows the track record of rising unit prices per customer in the Chinese market and the future growth potential.
Mr. Tamura “At the Super Brand Day of” Keito Shojo (JD.com) “(* 1) held on September 9, we won the first place in the watch category. November 11” China Singles’ Day “( We are strengthening our EC sales system toward * 2). In the current interim progress, we expect sales of about 146% compared to the previous year. “
* 1: Jin Dong.The second largest online shopping mall in China
* 2: Also called Singles’ Day. Various events are held, such as gathering single people to hold parties and marrying. It is also known as a day for shopping and gifts, and recently, it is often talked about when EC sites update the highest sales.
While sales in e-commerce are increasing in this way, the ratio with actual stores is “44% for e-commerce sales and 56% for actual stores” (Tamura). As for the reason why sales in e-commerce expanded as it approached almost half, “the result of holding an event at a super-scale mall contributed positively”. By the way, it is said that many of the products purchased are in the relatively high price range at physical stores, while many are in the medium price range of 100 to 300 dollars in e-commerce.
Mr. Tamura talks about education and scientific calculators, which are positioned as profit expansion businesses like watches, as follows.
Mr. Tamura “I think that the numbers will come back when face-to-face lessons are resumed. The needs for scientific calculators will not change. Classes have been resumed in quite a lot of areas in Europe, and sales performance is almost the same. It has returned to the 100% level. On the other hand, school closures are still continuing in emerging countries, and this is still behind. Still, in October, it has returned to 93% compared to the previous year. “
It seems that the effects of structural reforms are also appearing in the electronic dictionaries, musical instruments, projectors, and other system businesses, which are positioned as profit improvement businesses.
Mr. Tamura “As a result of steadily implementing structural reforms in the musical instrument business from two years ago, our profit structure has improved significantly, and we have achieved a profit margin of 9% in the first half of this year. Strategic products for keyboards” Privia “and” Casiotone ” , Slim & smart models are still doing well, accounting for about 45% of all instruments. “
From “0.6” to “4.1”!
For the full year ending March 2021, Casio expects sales of 220 billion yen and operating income of 10 billion yen. This is an upward revision of the initial plan of 6 billion yen to 4 billion yen.
Mr. Tamura “Originally, in the first quarter, it is assumed that the sales for the second quarter and the second half will be 75% of the previous year. We have a sales plan of 220 billion yen. On the other hand, the second quarter The period has returned to 80%, and in October it has returned to 96%. On the other hand, considering the increase in infections of the new coronavirus mainly in Europe and the United States, future restrictions on economic activities or sluggish consumer sentiment Due to risks, we have left the sales unchanged. “
As an initiative for that purpose, the watch business centered on G-SHOCK will be a major pillar.
Mr. Tamura “I think that the touch points with customers will change from now on. Also, the market size of general watches may shrink. However, G-SHOCK has the characteristic of toughness, its design personality and It is the only watch with fashionability and high functionality, so I think that the situation with strong inquiries will continue.
The market for smart watches will also expand. Based on that premise, we will further expand our own e-commerce ratio and strengthen digital marketing this fiscal year.
G-SHOCK will keep core fans and develop smart watches specializing in running and health by making the best use of its areas of expertise. “
Let me explain these efforts in more detail. First of all, about the point that “the touch point with the customer changes”.
Mr. Tamura “Casio has 1,400 physical stores” G-SHOCK stores “around the world. I think it is necessary to evolve this from a mere sales floor to an optimal and important touch point. In e-commerce, we want to be able to grasp the needs and problems of each user in real time and respond to optimal proposals and customizations. According to our research, there are 5 million G-SHOCK fans in the world. It is estimated.
We will continue to connect with each of the 5 million core fans who have 3 or more G-SHOCKs and who highly value G-SHOCKs for a long time. We are thinking of efforts to acquire such royal fans. In addition, there are 50 million customers who list G-SHOCK as a watch purchase candidate. “
Mr. Tamura analyzes the Chinese market, which has become an important foundation for Casio’s recovery in this quarter and is expected to continue to grow in importance.
Mr. Tamura “Assuming that the Japanese market size is 1, Casio watches are still sold only about 0.6 in the Chinese market. However, Swiss-made export watches are 2.9 in China compared to Japan 1. It is on sale. According to our estimates, G-SHOCK also has a potential market potential of around 4.1. There should be more room for growth as a market. “
Regarding the expansion of the smartwatch market, he mentioned the strong performance of the G-SHOCK sports model “G-SQUAD”. I didn’t mention the rumored “G-SHOCK smartwatch”.
Mr. Tamura “The G-SQUAD” GBD-H1000 “is a model equipped with both a heart rate monitor and GPS. This is not only a designated purchase for G-SHOCK fans, but also succeeded in capturing new users by firmly capturing exercise demand. In addition, we are promoting the provision of comprehensive running services through joint development with ASICS. Regarding this, we plan to announce the outline of our products and services in January 2021. “
In addition, Casio will expand these products and services to health areas such as walking, sleeping, and fatigue recovery in the future.